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TMI Blog2014 (2) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with the provisions of the Banking Regulation Act - The provisions of s. 115JB cannot thus be applied to the case of a banking company - the provisions of Sec.115JB could not be applied on the assessee – Decided in favour of Assessee. Interest on securities – whether the interest on securities are to be taxed on due basis or on accrual basis - Held that:- The decision in Tamilnadu Mercantile Bank Limited [2007 (1) TMI 128 - MADRAS High Court ] followed - the interest on securities can be taxed only on due basis - When the principal amount involved in the instrument itself is redeemable only on due date, there is no reason to hold that the interest element would be generated on accrual basis - The interest also goes along with the principal amount in the case of securities – Decided against Revenue. - I.T.A.No.879/Mds/2010, I.T.A.No.886/Mds/2010 - - - Dated:- 17-2-2014 - Dr. O. K. Narayanan And Shri V. Durga Rao,JJ. For the Petitioner : Shri C. Naresh, C.A. For the Respondent : Shri Hari Rao, JCIT ORDER Per V. Durga Rao, Judicial Member: These cross appeals one by the assessee and other by the Revenue are directed against the order of the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional grounds of appeal as under: "The appellant prays that the Honourable Tribunal be pleased to admit the following as an Additional Ground: 1. In as much as the appellant is not a company as per the Companies Act, 1956 the provisions of section 115JB is not applicable to the appellant based on the decisions in the case of ITAT Mumbai in the case of Krung Thai Bank Limited (ITA No.3390/Mum/09) ITAT Chennai in the appellants own case (ITA No.469/MDS/2010) and hence no tax can be levied based on the book profits. 2. Without prejudice to the above contention, the book profits can only be computed based on Part II and III of Schedule VI of Companies Act and therefore the AO had erred in adopting the profits as computed under Schedule III of Banking Regulation Act while computing such book profits u/s 115JB." 8. The assessee has also filed an affidavit and submitted as under: 1. I am the Chairman Managing Director of the Appellant Bank in-charge, inter-alia, of its income tax matters and as such fully familiar with the facts of the case, besides being authorised to swear to this affidavit. 2. The Appellant Bank has filed an appeal before this Hon'ble Tribunal in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by the consolidated order dated 11.06.2012 of the Tribunal in assessee's own case in I.T.A. No. 08/Mds/2007 for the assessment year 2003-04. 13. On the other hand, the ld. DR relied on the order of the Assessing Officer. 14. We have heard both sides and perused the materials on record. The issue relating to application of section 115JB and computation of minimum alternate tax has been considered by the Tribunal in assessee's own case for the assessment year 2003-04 and the Tribunal has observed that the issue stands already decided in favour of the assessee vide para 20 of its order, which is reproduced as under: "20. We have perused the orders of lower authorities and heard the rival contentions. We find that the issue regarding applicability of Sec.115JB on a Bank governed by Bank Regulation Act had coming up befoe a Co-ordinate Bench of this Tribunal in assessee's own case for Assessment Year 2000-01. It was held by the Co-ordinate Bench of this Tribunal in its order dated 3rd April, 2011 as under:- "7. We have heard the rival submissions and perused the orders of the lower authorities and the material available on record. In the instant case, the only dispute ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the ground of appeal raised by the assessee is allowed. 16. Ground Nos. 3 and 4 are mere academic and are dismissed as not pressed. 17. In the result, the appeal filed by the assessee is partly allowed. I.T.A. No. 886/Mds/2010 18. The only effective ground raised by the Revenue is with regard to interest on securities. At the time of hearing, the ld. Counsel for the assessee has submitted that the issue is squarely covered by order of the Tribunal in assessee's own case for the assessment year 2001-02 in I.T.A. No. 239/Mds/2011 vide order dated 12.10.2011. 19. On the other hand, the ld. DR fairly accepted that issue is covered in favour of the assessee. 20. We have heard both sides and perused the materials on record. The only issue raised in the appeal of the Revenue is whether the interest on securities are to be taxed on due basis or on accrual basis. The Tribunal has considered the very same issue in I.T.A. No. 239/Mds/2011 in assessee's own case and observed that the interest could be recognized only on due basis and relevant portion of the order is extracted as under: "5. The second issue raised by the Revenue is that the Commissioner of Income-tax (Appeals) h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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